Compliance Program Overview

What is CP (Compliance Program)?

A legal compliance management system operated to ensure that a company complies with fair trade related laws.

  • Enactment of Fair Trade Related Legal Model
    March, 2001: Self-regulated committee on compliance with fair trade standards launchedc.
    July, 2001: Enactment and declaration of self-regulatory norms that companies may refer to in introducing a system through public hearing, etc.
    January, 2002: Enforcement by the Fair Trade Commission of sanction reduction for exemplary companies practicing voluntary compliance.
    June, 2011: Receiving certificates for outstanding companies
  • Companies that Have Introduced and Are Operating a CP
    HYUNDAI STEEL, Hyundai Motors, Kia Motors, POSCO, Samsung Electronics, LG Electronics, and many others.
    ※ 692 companies running a compliance program as of 2018.

Why Need a CP?

  • Its prevents financial losses of a company caused by violation
    of fair trade laws.
  • It raises internal/external credit rating and minimizes damage
    due to the violation of laws.
  • Shift in management philosophy on fair competition is required
    in this age.

Effects from the Introduction of CP

  • Raises the status of of Hyundai Motors Group with regard to
    managerial transparency.
  • Prevents accidental violation of fair trade laws.
  • Reduces sanction on violation of fair trade related laws.

< Incentives for Companies with Outstanding CP Rating > As of January, 2015

Incentives for Companies with Outstanding CP Rating
CP Rating Exemption of Ex Officio Investigation Reduction or Exemption of Disclosure Order
Grade A 1 year Lowering disclosure by 1 level or shortening the period in case of a disclosure order by Fair Trade Commission on corrective actions, etc.
Grade AA 1 year and 6 month
Grade AAA 2 years * Exemption of Disclosure order

* Revised regulations on the operation of fair trade self-compliance programs and inducement (Fair Trade Commission pre-regulations, as of October, 2019)

Roles of Compliance Manager and the Team in Charge of Compliance

  • Enactment of Fair Trade Related Legal Model
    Defines adjustment, planning and execution of legal compliance and instills company-wide fair competition in employees.
    Status of compliance program is reported to CEO and the Board of Directors.
  • Compliance Team
    Operating compliance program, unifying channels of business operations, handling FTC inspection, etc.

Seven Key Factors of Compliance Program

Component Details of Execution
Expression of compliance intention
  • Announcement of intention by CEO using homepage, etc.
Designation and operation of compliance manager
  • Appointment of compliance manager through Board of Directors, etc.
  • Establishment of compliance regulations and company rules
Preparation and distribution of compliance handbook
  • Create a manual suited to management environment of the company and its organizational characteristics as a detailed guideline on the self-regulation compliance with fair competition
  • The manual should be written in plain language so that the employees can apply it in their work
  • Make the manual applicable in actual operations based on real cases rather instead of focusing on laws
  • Post and distribute the manual electronically at the same time using the company intranet so that it may be accessed by employees at all times
Operation of training program for employees
  • Perform continuous and systematic training so that the compliance system can be established in the company
  • Upgrade the ability to identify and recognize violation of laws with appropriate training in job characteristics
  • Perform special training for departments with high potential for violating laws
  • Raise effectiveness of training by inviting outside instructors or consulting the training department
Setup of supervision system within the company
  • Prevent unfair practices within the company and set up a supervision system
  • Be sure to arrange and verify with compliance manager and compliance team in implementing fair trade related tasks
  • Compliance manager reports to CEO and the Board of Directors on important details such as planning and performance on the supervision activities
Setup of HR sanction system and compliance encouragement awards
  • Sanctions must be in proportion to the severity of the violation of laws and repetition of unfair activities must be blocked
  • Manage by including a detailed plan in the company rules by consulting with related departments (HR team and Inspection Team)
  • Give out awards on outstanding compliance departments and individuals
Setup of document management system
  • Assign a systematic document manager for achieving sanction reduction from the competent authorities
  • Declaration of compliance intention and documents evidencing distribution, official notice document and compliance handbook, data related to internal supervision activities
  • Data related to sanctions on the violators of law, other data reported to FTC